London Must Choose Uber or Nostalgia

A disruptive technology has arrived from the U.S., in the form of the taxi app Uber, to threaten the protected markets that have allowed European cab drivers to keep fares high and competition low. It was no surprise then that in London today, thousands of the city's iconic black cabs snarled up traffic in Trafalgar Square to protest.

They're Luddites, right? Well, "Up to a point, Lord Copper." London's cabbies have some good arguments.

Uber says it isn't a taxi company but rather a kind of dating site that matches passengers to drivers and handles the money. Famously, and hilariously, its website includes the small print: "*Uber is not a transportation company." Based on that position, Uber has argued across the U.S., and now the world, that it shouldn't be regulated like a taxi company -- with enough success to achieve a valuation of $17 billion.

Uber also says its app -- which calculates distance and time spent in the cab, producing a price at the journey's end as a taxi meter does -- is not a taxi meter, it's an app, which is technically true nonsense.

Transport for London, the regulating authority for taxis in the capital, agrees with the company. It says the Uber app isn't a taxi meter because it isn't physically attached to the cab. (What if a driver glues his cellphone to the car?):

TfL set out its provisional view that smart phones used by private hire drivers -- which act as GPS tracking devices to measure journey distances and time taken, and relays information so that fares can be calculated remotely from the vehicle -- do not constitute the equipping of a vehicle with a ‘taximeter’.

However, given the level of concern among the trade, and the fact that some of the legislation in this area is unclear and able to be interpreted in various ways, TfL is to invite the High Court to give a binding determination on this issue.

Taxi meters are strictly regulated under U.K. law and can only be installed in licensed taxis. To acquire a license in London, among other things, drivers must pass "The Knowledge," a grueling test that requires two to four years of study, committing to memory 320 basic routes through the city, 25,000 streets and 20,000 landmarks. No satellite navigation is allowed, which is quaint but a bit silly given that most black cabs now have such systems.

The positions of Uber and TfL look silly, too. Of course Uber is a taxi company and of course its app should be subject to U.K. laws regulating taxi meters. Those archaic laws should be changed.

In the absence of reform, licensed cabbies face unfair competition from drivers who needn't incur the expenses imposed by the taxi laws. (There is a wonderfully sane statement of the cabbies' case by "Nick," in the comments section to this article.)

Uber drivers don't have to spend years learning "The Knowledge"; they can just rely on the GPS on their dashboards. Nor must their cars have wheelchair access or the 25-foot turning circle needed to navigate the tiny driveway of London's Savoy Hotel. Those regulations, among others, force most cabbies to buy the traditional black cab from the (now Chinese-owned) London Taxi Company. The starting price is 33,000 pounds ($55,000), the same as for a Mercedes E Class sedan.

The remedy lies not in blocking Uber but in making the laws apply to anyone who wants to make money running a taxi service.

If Londoners want to be taken to an obscure Mews alley address by a driver who doesn't need GPS to find it, and if they want to ride in iconic black cabs that are built like tanks and cost a fortune, they should make Uber drivers follow the current rules. If they aren't willing to pay for that level of nostalgia, they should change the law and say goodbye to The Knowledge, the London Hackney Carriage and all that.

To contact the author of this article: Marc Champion at mchampion7@bloomberg.net.

To contact the editor responsible for this article: Lisa Beyer at lbeyer3@bloomberg.net.

Marc Champion writes editorials on international affairs. He was previously Istanbul bureau chief for the Wall Street Journal. He was also an editor at the Financial Times and the editor-in-chief of the Moscow Times. He is based in London.
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